Broadcom’s Vmware takeover investigated
TECH entrepreneur Michael Dell’s $61bn (£52bn) sale of software company Vmware is facing an investigation from the competition watchdog amid customer fears over price increases.
Broadcom, a US semiconductor company known for developing wireless internet and Bluetooth chips, agreed to acquire software developer Vmware last year, the latest in a string of bumper technology deals for Mr Dell.
Tech giant Dell, founded by Mr Dell, acquired Vmware in a $67bn deal for data storage company EMC in 2015, before spinning out the company and agreeing to sell it to Broadcom last year.
Vmware makes “virtual software” that allows customers to access remote versions of technology such as Windows over the internet. However, the takeover by Broadcom has prompted fears that it could ramp up prices.
The Competition and Markets Authority said yesterday it was investigating the takeover, which was announced in May, and considering whether to refer it for a “phase one” inquiry. The regulator did not comment on what prompted the investigation.
The CMA said it would examine whether the “creation of that situation may be expected to result in a substantial lessening of competition”. The deal could see Mr Dell, who is already worth $50bn, secure a payout worth $21bn in cash and Broadcom shares. However, analysts S&P found a quarter of customers viewed the deal “extremely negatively”, fearing it will lead to reduced innovation and scrapped products.